OECD Reviews of Regional Innovation: Central and Southern Denmark

This study of Central and Southern Denmark takes place in the context of several national and international agendas. The EU has developed its Europe 2020 strategy, including the Innovation Union Initiative. The EU is also preparing for the next programming period for EU Structural Funds, calling on regions to develop “smart specialisation strategies” as a prerequisite for spending funds.

Within Denmark, a new national Innovation Strategy is also being developed that will need to take into account the role of regions and their contributions to national goals. In this report, the strategies of Central and Southern Denmark are therefore assessed given the types of innovation system potential, the regions’ institutional position, and the nature of their strategic choices in this political context.

Key Facts

While Denmark scores high on wealth and quality of life indicators, it suffers from lagging productivity growth, chipping away at its competitive advantage relative to other OECD countries (declining from -0.6% of the average of the top 17 OECD economies in 1996 to -11% in 2010). Central and Southern Denmark, like other non-capital Danish regions, are at around 82% of the Capital Region’s Gross Value Added per worker.

Both regions face future labour shortages, as well as population decline on the West coast. The crisis has highlighted the bottleneck of low-skilled labour, and growing shortages of certain high-skilled workers. Central Denmark benefits from a second-city growth pole, while Southern Denmark has a more complex settlement and economic development patterns.

Central Denmark accounts for 22.6% of the Danish population, 21.5% of GDP, 23.6% of national GDP growth 1998-2008, 14% of R&D expenditure and 23.4% of patenting.

Southern Denmark accounts for 21.8% of the Danish population, 20.4% of GDP, 19.1% of national GDP growth 1998-2008, 6.3% of R&D expenditure and 13.5% of patenting.

Central Denmark tends to capture a proportionate share of national STI policy funds (as compared with its share of national GDP), while Southern Denmark tends to capture only half of its GDP share in public R&D, but does perform better in capturing funds from other innovation programmes.

Policy Issues

How can secondary regions in high-income countries position themselves globally with strategies that truly reflect regional specificities?

What is the best way to strengthen regional innovation systems, triggering growth and transformation?

How do national policies to promote innovation take sufficient account of non-capital regional needs?

What vertical coordination tools for regions in a centralised context support innovation-driven regional development, particularly for growth drivers outside of regional competences?

Recommendations

Build on the new national-regional Partnership Agreements to promote greater inter-ministerial coordination at national level, considering longer-term commitments with associated funding.

Generate commonly accepted mappings and studies of research and industrial competencies to match the localisation of research with industry when possible.

Identify with regions and the EU opportunities for administrative simplification and flexibility in EU spending rules and/or the Danish interpretation of those rules.

Achieve greater clarity on the regional growth bottlenecks and growth expectations in different settings (rural areas) and also consider innovation in public services to address those growth barriers.

To achieve international best practices for smart specialisation as currently defined, adjustments include: next generation cluster policy (cross-border and cross-cluster); broader firm and civil society engagement; critical mass through linkages; and a policy mix that includes non-STI innovation.

Strengthen the most relevant innovation system actors and system relations, including through minimising programme proliferation and by developing functional mappings of innovation actors.

Develop and attract regionally needed skills to meet current and future labour shortages, with adapted policies for both low-skilled and high-skilled workers.

Table of Contents

Assessment and recommendations

Introduction

Chapter 1. Innovation and the economies of central and southern Denmark

Central and Southern Denmark Regions are in a knowledge-intensive country suffering from lagging productivity growth. This chapter first considers the national context for regional performance. It then reviews the demographic and economic trends of each region. Their economic and innovation performance is assessed within an OECD context and with respect to relevant peer groups. The chapter concludes with a discussion of areas of potential for innovation.

The relatively new regions in Denmark, mainly responsible for health care, are tasked with regional economic development to promote growth. This chapter first considers the mandates and institutions associated with the regional authorities. It then reviews the regional development policy context as well as that of national innovation and business development policies. The regional role in a multi-level governance context of municipalities, central government, and the EU is discussed. The chapter then explores the governance challenges of co-ordination within the region (among municipalities), with central government, and with other regions in Denmark and beyond to best achieve national and regional growth goals.

Chapter 3. Regional strategies for innovation-driven growth

What strategies and actions are being taken by the Regions of Central and Southern Denmark to promote innovation-driven growth? This chapter reviews the regional business development strategies and associated policy mix, particularly in light of EU expectations for smart specialisation strategies. The prioritised industrial sectors for regional action are discussed in depth. Other bottlenecks for regional growth are highlighted. Finally, the state of policy intelligence, monitoring and evaluation to inform the development of these strategies and projects is addressed.

How to obtain this book

Readers can access the full version of OECD Reviews of Regional Innovation: Central and Southern Denmark by choosing from the following options: